"[Green building] is not a fad," said James Thomas, chairman, president and CEO of Thomas Properties Group Inc., during a panel discussion at the 17th Annual PREA conference, held last month at the Beverly Hilton Hotel. "All the office buildings being constructed are green. I can't see any new office development going up that's not green."

Thomas said more than 1,000 buildings are LEED certified today. (According to September data from The US Green Building Council, purveyor of the LEED standard, there are another 7,843 LEED-registered projects.) Thomas contends that existing office buildings will eventually become green as well, though it could take anywhere from five to 15 years to get there.

Green thinking is something of a sea change from as recently as just a few years ago, according to panelist Walter Rakowich, president and COO of ProLogis. "Three years ago, I'm not sure how I'd have answered a question on green buildings, but there has been a major shift," he said. "The governments we get permits from are asking for green buildings; the investors are beginning to ask for green; and, most importantly, the customers—in the last 18 months—are asking for it."

Rakowich said his company has a global reach and that many of his European customers benefited from their countries signing on to the Kyoto Treaty, limiting their carbon footprint well before their US counterparts had embraced carbon neutrality as a way of doing business.

Now that the US is onboard, however, it's full speed ahead, according to the third panelist, Starwood Capital Group's chairman and CEO Barry Sternlicht. "The scientific debate is over," he said. "The US is catching on late," but its developers are making green strides.

Some emerging countries are still struggling with the concept, namely India and China. It can become a dilemma as to whether to fund those projects that are not environmentally sensitive, according to Sternlicht.

"Sometimes you can't see the project in front of you," he said, "because the smog is so thick."

Instant Insights /

Real Estate's Future Looks Green

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